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Union Pacific Announces Emissions Reduction Program in Cooperation With the California Resources Board

Omaha, Neb., June 24, 2005 
Union Pacific Railroad today announced signing of a voluntary agreement with the California Air Resources Board (CARB) that will provide for continued reductions of diesel emissions at the company’s rail yards in California. Effective June 30, 2005, the program focuses on phased-in initiatives at nine of Union Pacific’s largest rail yards in the state. The agreement was developed cooperatively with CARB and BNSF Railway Company (BNSF) and approved by all three parties.

This is the second significant agreement of this type. The first one was signed in 1998 and covered nitrous oxide emissions (NOx) from locomotives that contribute to the formation of ozone. Under the first agreement, NOx levels from locomotives will be reduced by 65 percent in the South Coast Air Quality Management District. The latest agreement represents the next logical step in the process and will reduce particulate matter (PM) emissions statewide.

The program has the potential to reduce particulate emissions by an estimated 15 to 20 percent at rail yards by June 2008 when all elements of the program are phased-in. To achieve this reduction, the program focuses on the following actions:

Evaluating other medium-term and longer-term actions to reduce emissions

"Union Pacific is committed to doing its part to improve and protect the environment, and we’ve made significant progress in emissions reduction through the use of new technology," said Robert Grimaila, vice president, Environment and Safety for Union Pacific Railroad. "Together with CARB officials, we’ve identified specific actions that will further our efforts by combining the latest technology with operational changes to make an immediate improvement to California’s air quality."

The company expects to spend about $20 million over the next three years to implement the various aspects of this emissions reduction program.

In October 2004, Union Pacific announced an emissions reduction plan – using a combination of new technology, operational changes and new equipment – to achieve a goal of a 10 percent reduction in emissions by the end of 2007 in its Davis Yard in Roseville. Since 2000, Union Pacific has reduced emissions from the J. R. Davis Yard by 15 percent, so the company will actually reduce emissions by up to 25 percent in just seven years.

"Rail is by far the most environmentally friendly method of transporting freight. Over the past several years, we’ve made significant progress in modifying our operations to reduce emissions," Grimaila said. "We intend to build upon this progress – including what we’ve learned in the last eight months from our aggressive work in Roseville – to maintain our role as an environmental leader in the transportation industry."

The 15 percent emissions reduction in the Davis Yard since 2000 was achieved through the following efforts:

Fleet Turnover, Reducing Emissions - Since January 2000, UP has purchased more than 2,000 new fuel-efficient locomotives that comply with new, stricter USEPA Tier 0, Tier 1 and Tier 2 standards. At the same time, more than 1,300 older units were retired, and more than 800 units were overhauled (remanufactured) to meet the stricter standards.

Moving and Modifying Locomotive Load Test Procedures - In 2000, UP reorganized testing operations at the yard so that they take place further from residences. In addition, UP is increasing the use of locomotives that can be tested more quickly.

Auto Start-Stop Installations - UP now has nearly 2,000 locomotives with computer-controlled devices that limit engine idling to only the time necessary to ensure safe and reliable operation. Approximately 85 percent of the locomotives permanently assigned to the Sacramento/Roseville area are now equipped with this technology.

Operational Efficiency Improvements - UP has optimized the manner in which trains are configured at the Davis Yard, reducing the amount of locomotive operations necessary to assemble trains.

Fuel Efficiency Improvements - Through fleet turnover and other improvements, UP has achieved more than a 16 percent improvement in fuel efficiency since 1994. Greater fuel efficiency means fewer emissions.

Cooperative Efforts - UP has cooperated with the Placer County Air Pollution Control District (PCAPCD) to apply for a grant from the West Coast Diesel Emissions Reduction Collaborative chaired by Region 9 EPA that would provide for a ‘proof of concept’ of some new technology. Locomotive emissions from various work areas around the shop would be ‘scrubbed’ to remove 98 percent or more of the NOx and PM.

"Many of the actions we took in Roseville will be implemented throughout California to help reduce particulate emissions," Grimaila said.

Union Pacific Corporation owns one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, is the largest railroad in North America, covering 23 states across the western two-thirds of the United States. A strong focus on quality and a strategically advantageous route structure enable the company to serve customers in critical and fast growing markets. It is a leading carrier of low-sulfur coal used in electrical power generation and has broad coverage of the large chemical-producing areas along the Gulf Coast. With competitive long-haul routes between all major West Coast ports and eastern gateways, and as the only railroad to serve all six major gateways to Mexico, Union Pacific has the premier rail franchise in North America.

For further information contact Kathryn Blackwell at (402) 544-3753 or (402) 319-4288.

The statements and information contained in the news releases provided by Union Pacific speak only as of the date issued. Such information by its nature may become outdated, and investors should not assume that the statements and information contained in Union Pacific's news releases remain current after the date issued. Union Pacific makes no commitment, and disclaims any duty, to update any of this information.